From thesis to target list.

Write the thesis as a paragraph

Before you search for a single company, write down what you're looking for in plain sentences, as if explaining it to a smart friend outside finance. Not a list of criteria yet: a paragraph.

This does two things. It forces you to say why you want this kind of business, which is what you'll later say to owners. And it shows you which parts of the thesis can be searched for and which can only be judged by reading about a company.

Turn it into filters

Now break the paragraph into things you can check. Most theses come down to five kinds of filter:

• What they do. The sector, but more usefully the specific activity. "Specialist maintenance for commercial buildings" finds better companies than "facilities services".
• Size. You rarely know revenue for private companies. Use what you can see: headcount, number of sites, years trading, published accounts where they exist.
• Ownership. Founder- or family-owned, not already backed by an investor, not a subsidiary of a group.
• Signals of fit. Things that suggest the economics you want: long customer relationships, contracts, accreditations, a niche they've held for years.
• Hard no's. Anything that rules a company out regardless of fit: activities you won't touch, structures you can't buy.

Keep the filters few and honest. Every extra criterion shrinks the list, and some criteria you think you need ("owner is considering a sale") can't be known from the outside anyway. That's what the conversation is for.

Where companies come from

No single source gives you a complete list. The good lists are stitched together from several, then cleaned. Useful places to look:

• Trade associations and accreditation bodies. Member lists are often public, and membership is itself a signal of a serious, established business.
• Trade fair exhibitor lists. Companies that pay to exhibit are active and investing.
• Official company registers. Useful for checking ownership, age and filed accounts, and for finding companies the directories miss.
• Supplier and customer pages. A good company's website often names its suppliers, partners and peers. One good fit points you to several more.
• Sector press and awards. Shortlists for regional and sector awards are full of founder-owned businesses.
• Your own network. Advisers, lenders, operators and other investors in the sector. Ask them who they respect, not who is for sale.

Commercial company databases are useful for a first pass, but treat them as a starting point. Descriptions are often generic, sizes are estimates, and the best small companies are frequently missing or misclassified. Expect to read the company's own website for every name that makes the final list.

Find the right person

A list of companies is not a target list. A target list has a named person against every company, and a way to reach them.

• For owner outreach, write to the owner. The founder or majority shareholder, usually also the managing director. Company registers will often tell you who holds the shares.
• Where ownership is shared, pick the person who runs the business day to day, and don't write to several family members at once.
• Check the person is current. Founders step back, pass away, or hand over to the next generation. A note to the wrong person, or worse to someone who has died, does real harm.
• Find a working email and their LinkedIn profile. If you can't find either, keep the company on the list but mark it as hard to reach.

Only use contact details that are published or that you can reasonably infer from published information, and make sure you understand the data protection rules that apply to you and to the people you're contacting.

Exclusions

Before anyone is contacted, take out the people who shouldn't hear from you cold:

• Existing relationships, yours or your investors'. They deserve a personal note, not a first note.
• Companies in a live sale process, or that you're already speaking to through an adviser.
• Competitors of your investors' existing businesses, if that would cause a conflict.
• Anyone who has asked not to be contacted, by you or anyone at your firm. Keep that list forever.

Tier the list

Not every company deserves the same effort. Split the list into two or three tiers:

• Tier one: strong fit on every filter. These get the most research and the most personal notes.
• Tier two: good fit with one or two unknowns. Still a personal note, but the research can be lighter.
• Tier three: possible fits you'd like to learn more about. Contact them last, once your messages are proven on the first two tiers.

Resist the urge to start with tier three because there are more of them. Your first weeks are when you learn what works; spend them on the companies you most want to meet.

How big should it be?

Work it out from your pace, not the other way round. If you can contact a certain number of new people each working day, properly, then your list needs to cover that number times the working days in your search.

Most people overestimate their pace and underestimate how fast a good list runs out. If your list is small, that's not a reason to send more to each person. It's a reason to widen the thesis carefully, or to add a second, related thesis.

The team calculator does this arithmetic for you.

Keep it alive

A list starts going stale the day you finish it. People change roles, companies are sold, new ones appear. Treat it as a living record:

• Record every contact, every reply and every "not now" with a date to come back.
• Refresh the people on it before each new round of outreach.
• Add companies as you find them, especially ones mentioned by owners you speak to.
• Never share it or hand it to anyone else to use. It's part of your edge.

Building and maintaining a list like this takes real time, and it's easy to let slip once outreach and meetings start. If you'd rather not do it yourself, a team of sourciers can build the list from your thesis, keep it current, and work through it for you.